If relevant events are _____,diversification will NOT reduce risk.
A)positively correlated
B)negatively correlated
C)dependent
D)independent

Question

Quizplus · Accepted Answer

When relevant events are positively correlated, diversification will not reduce risk. This is because when one asset is negatively affected by a relevant event, other assets in the portfolio are also likely to be negatively affected.

If Relevant Events Are _____,Diversification Will NOT Reduce Risk